Global engineering and construction deals insights: Q1 2019

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Executive summary

M&A activity within the sector continued to lag prior years on an overall deal value and volume basis. Coming off a relatively robust Q4 2018, deal volume and values decreased to their lowest quarterly level in the last three years. While Q1 tends to be a laggard on the overall year, Q1 2019 value of $15.6 billion was down 30% versus Q1 2018; on a volume basis Q1 2019 decreased 25% versus Q118. During Q1 2019 there was only one deal with value above $1.0 billion. Global economic uncertainty combined with ongoing geopolitical influences continue to put a drag on M&A within the sector. While there was some positive movement on certain of the ongoing trade disputes, there was no clarity on resolution.  Going into Q2, resolution of trade disputes and some favorable economic data could help drive increased M&A activity.

Key trends/highlights

  • Deal value in Q1 2019 was $15.6 billion, a significant decline of 52% over Q4 2018. The deal value in Q1 2019, also declined by 29% over Q1 2018. Deal volume in Q1 2019 was 510, a decline of 19% over Q4 2018. Deal volume in Q1 2019 also declined by 25% over Q1 2018.
  • Average deal size in Q1 2019 was $90.9 million, a decrease of 30% compared to Q4 2018. The average deal size also declined slightly by 8% in Q1 2019 vis-à-vis Q1 2018.
  • Asia and Oceania was the most active acquirer in the global engineering and construction sector. In Q1 2019, the region made up for 65% of deal value, driven mainly by a $5.9 billion acquisition.

“Q1 2019 M&A activity was off significantly from the same period in 2018. Economic uncertainty combined with ongoing trade disputes and related geopolitical tensions outweighed underlying solid sector fundamentals.”

Colin McIntyre, US Engineering and Construction Deals Leader

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Colin McIntyre

Engineering and Construction Deals Leader, PwC US

Michael Sobolewski

Engineering and Construction Leader, PwC US

Jonathan Hook

Global Engineering and Construction Leader, PwC United Kingdom

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